Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Saturday, September 26, 2009

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’

* A tip of the hat to TAX GURUKerry M. Kerstetter for bringing my attention to the above picture.

* Mary O’Keefe of BED BUFFALOES IN YOUR TAX CODEhas “turned me on” to a section of the IRS website that has published all of the various public comments, including mine, that were submitted in response to IRS Notice 2009-60 regarding the regulation, registration and licensing of paid tax preparers. Click here.

Once I have finished all the 2008 GDEs (hopefully by September 30) I will take some time to read through these comments and will write a TWTP post about my reading. In the meantime you are welcome to check out the comments yourself.

* I seem to recall seeing business cards of several tax consultants years ago that included the phrase “former IRS employee” on them. This was thought of as a selling point – using a “former IRS employee” to prepare your taxes would assure proper filing and help to avoid an audit or other problems with the IRS because of the consultants’ familiarity with IRS practices, procedures and personnel.

Well, folks, it ain’t necessarily so! Just ask the clients of Debra Windham of Chicago a former secretary with the IRS Criminal Investigative Division.

Kay tells us about Senate Finance Committee Chairperson Max Baucus’ revisions to his previous submitted bill, which was discussed in the last BUZZ.

* It is that time of the year when the Tax Foundation tells us which states are best for business by presenting the “2010 State Business Tax Climate Index”, its annual report on the "Business-Friendliness” of state tax systems.

The report tells us that “South Dakota has the most ‘business-friendly’ tax system, and New Jersey has the least”. As a long-time resident of the Garden State NJ’s placement on the list is certainly no surprise to me. New Jersey was dead last on last year’s list as well.

“The top 10 states in the 2010 Index, from 1st to 10th, are South Dakota, Wyoming, Alaska, Nevada, Florida, Montana, New Hampshire, Delaware, Washington and Utah. The bottom 10 states, from 41st to 50th, are Vermont, Wisconsin, Minnesota, Rhode Island, Maryland, Iowa, Ohio, California, New York and New Jersey.”

Let’s hope that NJ voters take head and “throw the bastards out”, including Governor Corzine, in the upcoming election.

* This past week my fellow tax bloggers were all talking about the plea deal for “Girls Gone Wild” founder, and basic all-round arsehole, Joe Francis..Joe Kristan tells us – “It looks like a good deal for him, as he gets no additional prison time” in his post “'Girls Gone Wild' Figure Goes For Plea Deal” at the ROTH AND COMPANY TAX UPDATE BLOG. Too bad – he could have started a new line of videos under the banner “Prisoners Gone Wild”.

Kay Bell tells us that – “According to published reports, Francis will plead guilty this afternoon in a California court to filing false tax returns (and one count of bribing Nevada jailers for food; really), receive credit for time (301 days) already served in connection with the tax charges and pay $250,000 in restitution” in “Tax Plea for 'Girls Gone Wild' Founder” at DON’T MESS WITH TAXES.

In the similarly titled post “‘Girls Gone Wild’ Founder Takes Plea” at TAX GIRL Kelly Phillips Erb reports that – “Francis’ attorney, Brad D. Brian, has said – and I’m not making this up – that prosecutors ‘didn’t understand Francis’ business model’ and the expense related to the ‘Girls Gone Wild’ brand”. Are “rufies” deductible?

I am disappointed that Francis is basically “off the hook”. Some “shower play time” with fellow inmates would have done him some good.

* Trish McIntire talks about “Putting Back RMD” over at OUR TAXING TIMES. She tells us that -

“Thanks to a law changes last year, taxpayers over 70 and 1/2 are not required to take a required minimum distribution (RMD) from their IRA or pension plan in 2009. But what happens if you did and have changed your mind (or your plan executive didn't tell you about this year's special rules)? You can put it back.”

The IRS has recently issued “guidelines” for “putting it back”, which Trish explains –

“So if you took a distribution in 2009, you can put back up to the amount of your RMD and not pay taxes on the returned money if you can get it back in 60 days or Nov. 30th which ever is later. Rollovers are limited to one a year from each account and this hasn't been changed. And it only applies to taxpayers required to take RMDs. If you have questions about this, check with your tax professional.”

* And speaking of OUR TAXING TIMES, Trish continues her ongoing series with “Buyer Education IV”, which discusses “What do you want a tax professional to do for you?”

I laughed with I read her comment (that applies to me as well, and I expect most tax professionals) – “I don't know how many times I have been told that, ‘It's a simple return’ when it had rentals or a business”

And I especially like her final point -

“Don't get mad at us when we won't do what you want. I don't work for you, I work for me and provide you a service in the form of an accurate tax return. I don't care what your other preparer did. And remember, just because you haven't gotten caught, yet, doesn't make your cheating right. There are plenty of people out there who will be glad to get you the refund you think you deserve.”

* A “retweet” by the TAX GIRL brought me to a good post on “Why You Should Hire a Tax Professional” by Miranda at PERSONAL DIVIDENDS. She also provides some tips for choosing the right tax professional for you.

Her final of three reasons is a very good one –

“Finally, a tax professional can save you time. It used to take me about four hours to prepare my own taxes. I had to read instructions, make sure I did everything properly, and fill out the forms. It was tedious, time-consuming work. My tax professional does the same thing in about an hour. I still have to gather my documents, but since I organize them throughout the year, this really isn’t very difficult. The time savings of three hours is quite valuable to me, and worth the $450 I pay for my tax preparation.”

I have often said that a majority of my clients are smart enough to be able to prepare their own tax returns but they just don’t want to be bothered. They would much rather pay my reasonable fee (less than the example) then put up with the aggravation of doing it themselves. Plus by having me do it they are sure that they do not miss anything.

If you are looking for a tax professional a good place to start is www.taxprofessionals.com. Don’t contact me – I am not looking for new 1040 clients.

BTW – I was very pleased to see that the term “CPA” was not used at all in the post.

“President Obama has asked the President's Economic Recovery Advisory Board (PERAB) to develop options for tax reform. The members of the tax subcommittee are preparing ideas to be considered by the board and would like to give anyone a chance to have input into the process on this important issue. Anyone wanting to share ideas and opinions for consideration by the subcommittee can do so here. The deadline for submissions is October 15th, 2009.”

You can bet that the first thing I do on October 2nd is sit down at my computer and write out my suggestions.

Before contacting me with questions about how a blog post relates to your specific situation, please be aware that I do not give free tax advice to non-clients by e-mail, comment response, or phone. So don't waste your time and mine.